Investing in customer loyalty: the moderating role of relational characteristics

Published on Mar 1, 2015in Service Business
· DOI :10.1007/s11628-013-0213-y
M.S. Balaji18
Estimated H-index: 18
(Taylors University)
The purpose of this study is to explore the linkages between relationship investment, relationship quality, and loyalty, as well as the moderating role of relational characteristics of age (length of relationship), density (number of unique relational ties), and dependence (extent of dependence on relationship partnership). Based on the interpersonal perspective, this study extends previous research by incorporating relational characteristics in understanding the effects of relationship investment strategies on loyalty. Responses collected from 381 actual retail banking customers were analyzed using structural equation modeling and hierarchical regression analysis. The results show that in forming customer loyalty, relationship investments, satisfaction, and commitment play a critical role. However, it was found that these relationships are moderated by the relational characteristics. Specifically, the effect of relationship satisfaction on loyalty decreases as the length of the relationship increases. On the contrary, a positive satisfaction and loyalty relationship was observed for high density users. These findings help managers in developing and implementing relationship investment strategies that enhance customer loyalty.
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